Western Areas (WSA)

Citi has initiated coverage of nickel miner
Western Areas
with a “buy" recommendation and a price target of $7.75, assigning the stock a premium rating for the quality of its assets and exploration potential.

In an initiation note, analyst David Haddad said Western Areas operated two of the highest grade nickel sulphide mines in Australia: Spotted Quoll and Flying Fox in Western Australia.

These mines grade at 4 per cent to 6 per cent nickel and, at times, average production grades have exceeded 7 per cent.

Present mine life at Western Areas’ Forrestania operation, which includes Spotted Quoll and Flying Fox, is nine years, but the company is pouring plenty of money into exploration.

Mr Haddad believes there is a strong chance of this initiative succeeding.

“We anticipate continued additions to the reserve base that will allow mining to proceed beyond 2024," he says.